BELARUS NEWS AND ANALYSIS

DATE:

29/03/2010

Minsk Faces Uphill Court Fight

By Anatoly Medetsky

Russia's court dispute with Belarus over the export duty for oil products will be so complex that a ruling may come well after 2012, when Moscow plans to drop the duty voluntarily, First Deputy Prime Minister Igor Shuvalov said Friday.

He was reacting to a complaint from Belarus, a member of two unions with Russia, filed with the Commonwealth of Independent States Economic Court the previous day in an effort to remove the duty, which Russia began charging Jan. 1.

Shuvalov said Russia introduced the duty legitimately, while Belarus insisted that bilateral free trade agreements from 1992 and 1995 canceled duties for all goods, except for crude oil.

If Russia agrees on the terms of creating a common economic space with Kazakhstan and Belarus, it will nix the duty effective Jan. 1, 2012, when economic barriers are now scheduled to fall, Shuvalov said.

"It's a difficult dispute, and it will take considerable time to review and I think : export duties will disappear before the court makes a decision," he said on Rossia 24 state television.

The court, which has largely been dormant in recent years, does not have the authority to issue legally binding decisions, but instead hands out recommendations.

The Belarussian Justice Ministry, in announcing the complaint, said the customs fee reduced - and in some cases halted - the supply of oil products to its petrochemical plants, threatening to bring them to a standstill.

The change in Russia's customs policy "undermined the basic principles of good neighborly relations" between the countries, the ministry said in a statement on its web site.

Moscow and Minsk formed a loose union state in the mid-1990s, but its working bodies have little influence to act on either side.

Russia, Belarus and Kazakhstan also are members of a customs union, which came into effect in January.

Foreign Minister Sergei Lavrov said Friday that the dispute was not politically motivated and that he didn't see anything unusual in such litigation between the countries. The countries have had regular disputes over trade, but both sides generally deny that they are linked to political squabbling.

Belarus bitterly - but unsuccessfully - resisted Russia's move to introduce an export duty on crude oil that was not for Belarus' domestic consumption, a change that went into effect in January.

Russia is facing a second straight budget deficit this year after many years of surplus, and introducing the duty would help it cover the shortfall. But the move has taken a heavy toll on Minsk's fiscal health, as income from refineries processing Russian fuel is a major source of budget revenue.

Source:

http://www.themoscowtimes.com/business/article/minsk-faces-uphill-court-fight/402674.html


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